There’s just a week left to complete your personal Self Assessment tax return and file it online if you’ve not already done so.
January the 31st is the deadline and there are fines of £100 for missing the deadline plus daily penalties of £10 per day up to a maximum of £900. If you’re 6 months late you’ll get a fine of 5% of the tax owed or £300 and file 12 months late and there another 5% or £300.
Don’t forget that filing your tax return is only half the job, HMRC will then expect you to pay any tax you owe. If you’re late there is another fine of 5% of the tax unpaid after 30 days, 6 months and 12 months.
This year it will be interesting to watch HMRC’s activity after the deadline. They’ve already told us that their computers are whirring away to collate your marketplace sales, credit card spending, Airbnb income and spending habits. If things don’t appear to add up then they could come knocking to enquire about other sources of income you may have failed to declare.
If you have by any chance already submitted your tax return and are now feeling guilty about some undeclared income, that’s exactly how HMRC want you to feel. Whilst it might be embarrassing to go back to HMRC and tell them you forgot to include your online sales, it’ll be a much nicer call if you do it before the 31st of January and definitely it will be more unpleasant if HMRC contact you first. Doubtless they’ll be looking for a few test cases to grab some publicity and encourage others to be more forthcoming, don’t let it be you.
Our best advice has always been that, whilst of course you can complete your own tax return online, an accountant is worth their weight in gold. If you’re in the least bit unsure about completing your tax return, HMRC are remarkably helpful if you can get through to their helplines at the busiest time of the year, but an accountant works for you and should not only know every tax break you’re entitled to, but can also help with tax planning for the year ahead.
Is it better to buy a car or lease a car? Should you remain a sole trader or become a limited company? How much can you offset for use of your home as an office or your garage as a warehouse? These are all questions to ask your accountant and, if they’re any good at all, they’ll save you more in tax than they’ll charge you for their services.